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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (217839)	11/28/2006 10:54:58 PM
From: eracer	Read Replies (3) \| Respond to of 275872

Re: The cost won't be that much cheaper...But it wouldn't because of the lower costs, it helps some, but AMD will now have the capability to accept a lower margin for greater sales and still make more money. I think you could have summed up your first three paragraphs by saying "I agree" instead. Smaller dies equals lowered costs and greater supply which tends to lower ASPs. Whether AMD makes "more" money remains to be seen. It might be AMD makes the same money while Intel makes less than they otherwise could have. I think it was somewhat humorous to see Sarmad clinging to some hope that AMD moving to 65-nm wouldn't result in smaller die sizes. He obviously is hoping AMD is cost and production constrained so that Intel isn't negatively impacted by AMD's move to 65-nm. He loves to talk about die sizes, production costs and production capacity. He gets rather jumpy when AMD can pose a threat to Intel in those areas. Early this year he was claiming AMD had little need for Chartered or FAB36. His thinking (as an Intel investor) was why would AMD want to make more chips when Intel can already make so many. I warned him that Intel was the one who was more likely to have an overabundance of capacity and inventory while AMD would use up their extra capacity in the move to dual-core and larger AM2 dies. Here we are near the end of the year and Intel's inventories are quite large and AMD can't even produce enough chips to meet demand. The looming problem for Intel is "how much is the Conroe premium worth?"...How much of a premium can Intel get for Conroe over K8 X2s? If it's a problem for Intel then it is a problem for AMD. If Conroe isn't worth much more than K8 then K8L isn't worth much more than K8 either. But if history is any guide a modest performance increase on the high-end is worth a dis-proportionally larger price tag. Perhaps the looming question for AMD is "how little is the K8 worth when Conroe and Merom make up 80% of the Intel desktop and notebook processor market instead of 20%". How much of a premium can Intel get for Conroe over K8 X2s? In another market, notebooks, the answer has been "not a lot". Turion has been a wonderful success story for AMD. Do you have a link to the Q3 '06 ASPs for AMD and Intel notebooks? Are Intel's notebook ASPs only 10% higher than AMD's? 20% higher? 40% higher?